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Your Ultimate Guide to US Payroll in Mississippi

Managing payroll in Mississippi? Read our state-by-state guide to US payroll taxes to learn what you must withhold and deduct from employee wages.

Gabriele Culot
Written by Gabriele Culot
July 26, 2023
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Key takeaways

  1. Business owners in Mississippi need to consider proper payroll management and taxes to remain compliant in the state
  2. Key payments to consider include unemployment insurance, personal income tax, and workers’ compensation
  3. Deel streamlines the payroll management process and ensures compliance through automated features and up-to-date state-specific knowledge

Managing payroll is an important responsibility for employers, involving various tasks and adhering to multiple rules and regulations. These processes are further complicated when hiring across state lines as you have to consider the diverse employment laws and tax regulations in each state. 

To help you navigate these considerations, we’ve put together this introductory guide on what employers need to pay and withhold from payroll in Mississippi. 

Paying unemployment insurance 

Employers are typically aware of the requirements for withholding federal taxes, such as Medicare and Social Security. In addition, certain Mississippi taxes are withheld from an employer’s paycheck as part of employer payroll taxes (also known as payroll withholding). One of these payments is unemployment insurance, also known as UI.

The US Department of Labor administers unemployment insurance, a government-run program that provides temporary financial assistance to eligible individuals who have lost their jobs and are actively seeking employment. 

In Mississippi, the employer is responsible for paying unemployment insurance, which can be completed through an online portal. For more information on paying unemployment insurance, you can visit the Mississippi Department of Employment Security online.

Withholding personal income tax from your Mississippi employee 

Personal income tax is another Mississippi state tax that employers must withhold from their employees’ payroll. Also known as individual income tax or state income tax, the payment is a tax on the income of Mississippi residents. 

When calculating personal income tax, various factors are considered. For example, taxable income, tax deductions, tax credits, tax rates, and more. After making an accurate and specific calculation, the amount is withheld from the employee’s wages by the employer.

The employer then pays the withheld amount to the state, an action that can be completed through Mississippi’s online portal. For more information on paying the withholding amount, you can consult the Mississippi Department of Revenue online.

Paying your Mississippi workers’ compensation 

Workers’ compensation is an additional payment to consider, over and above payroll taxes. In Mississippi, paying workers’ compensation is a requirement when hiring five or more employees in the state. 

The premium, calculated based on payroll, acts as insurance for an employee’s injury while performing their job. The payouts provide financial and medical benefits to employees who suffer work-related injuries or illnesses.

In Mississippi, workers’ compensation is usually purchased through a qualified commercial carrier. If you need help finding a qualified commercial carrier, you can consult the Workers’ Compensation Commission.

Take note: You must verify that your workers’ compensation insurance complies with the state’s regulations for workers’ compensation.

Simplify US payroll tax compliance with Deel

Although this guide offers valuable information on Mississippi payroll taxes, it's essential to understand payroll compliance and state requirements on a deeper level. As an employer or business owner, payroll can be daunting. That’s why many companies rely on Deel for a streamlined and fully compliant approach.

Our comprehensive solution helps business owners manage US and international payroll, considering payments, taxes, worker classification, and risk mitigation. Create a more efficient and compliant payroll system and request a Deel demo today.

Disclaimer: This article is provided for general informational purposes and should not be treated as legal or tax advice. Consult a professional before proceeding.

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